With mortgage rates still higher than many landlords budgeted for and tax rules tightening over the years, plenty of people are asking whether buy to let is still a smart move in 2026. Whether you're a seasoned landlord or thinking about your first investment property, the landscape has shifted — and it pays to go in with your eyes open. Here's what you need to know before you commit.
Understanding the Real Costs of Buy to Let in 2026
Let's be honest — buy to let isn't the passive income goldmine it once seemed in the 2000s. Today, the numbers need careful working out before you sign anything. First, remember that buy to let mortgages typically require a larger deposit than residential ones — usually at least 25%, and sometimes more depending on the lender's criteria. Rates on buy to let deals have also been higher than residential mortgages in recent years, so your monthly outgoings can quickly eat into rental income.
Then there's the 3% Stamp Duty Land Tax surcharge on top of standard rates for second properties in England and Northern Ireland (Scotland and Wales have their own equivalents), plus solicitor fees, letting agent costs, maintenance, landlord insurance, and potential void periods when the property sits empty. Add it all up before you assume the rental yield will cover everything comfortably. A rough rule of thumb: aim for a gross rental yield of at least 5–6% to give yourself breathing room, though your own circumstances will vary.
The Tax Picture Every Landlord Must Know
This is the bit many new landlords don't fully appreciate until it's too late. Since 2017, landlords have gradually lost the ability to deduct mortgage interest as a business expense in the traditional sense. Instead, you now get a 20% tax credit on mortgage interest — which hits higher-rate taxpayers particularly hard. If you pay 40% income tax, you're effectively only getting relief at half the rate you used to.
On top of that, rental income is added to your other income for tax purposes, which can push you into a higher tax band. Some landlords choose to hold properties through a limited company structure to manage this differently, but that route comes with its own costs and complexities. This is genuinely an area where speaking to a qualified tax adviser (not just a mortgage broker) is worth every penny — the rules are detailed enough that getting it wrong could be costly. You can also use TrueSaver to compare mortgage options and get connected with FCA-authorised advisers who understand the landlord market.
How to Find the Right Buy to Let Mortgage Deal
If you've done the sums and buy to let still makes sense for your situation, finding the right mortgage is crucial. Buy to let mortgage affordability is typically assessed on the rental income the property is expected to generate — lenders usually want the rent to cover 125–145% of the monthly mortgage payment, sometimes more for higher-rate taxpayers. This means the property itself needs to stack up, not just your personal income.
Fixed-rate deals offer certainty — you know exactly what you're paying each month, which helps with cash flow planning. Tracker rates can be cheaper initially but leave you exposed if rates rise. Two-year fixes give flexibility to remortgage sooner; five-year fixes lock in security for longer. There's no universally right answer — it depends on your plans for the property and your attitude to risk. Rather than going direct to one lender, it really does pay to compare the market. TrueSaver makes it straightforward to see a range of options and get matched with an adviser who can guide you through what fits your goals.
Terry's Top Tips
- Run the full numbers before you commit — factor in stamp duty, maintenance, voids, agent fees, and tax, not just the mortgage versus rent comparison.
- Check the rental yield carefully — aim for at least 5–6% gross yield to give yourself a realistic buffer against costs and rate changes.
- Understand the tax rules for your situation — higher-rate taxpayers and limited company structures are taxed very differently, so get proper advice before buying.
- Compare buy to let mortgage deals properly — don't just go with your current bank; use a comparison service like TrueSaver to see the wider market.
- Think long-term — property investment tends to reward patience; if you might need the cash within two or three years, it may not be the right move right now.
Buy to let in 2026 can still work — but only if you go in informed, plan carefully, and get the right mortgage in place from day one. Ready to find your best mortgage deal? Get a free quote from an FCA-authorised adviser at TrueSaver — no obligation, takes 2 minutes. Visit truesaver.co.uk/mortgage
